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Saturday, June 4, 2011

Weekend Op-Ed Piece

It is no doubt true that there are many cases in which the criminal could not have known that he was breaking the law, but to admit excuse at all would be to encourage ignorance where the law maker has determined to make men know and obey, and justice to the individual is rightly outweighed by the larger interests on the other side of the scales.

Oliver Wendall Holmes

One doesn't need to be a good man to perceive what's lawful, but with that said, what would a week in spine be without more tabloid sensationalism? BNET, the CBS interactive business network reported on Friday, June 3, 2011 that a federal appeals court ruled that the trial judges from the First District Court in Boston have applied the false-claims and anti-kickback statute too strictly. The appellate court's ruling follows a string of seven federal court decisions which had required that conspirators "expressly" acknowledge they are breaking the law when fraudulently applying for reimbursement from the government for medical expenses. Medicare, insurers and healthcare providers would have to find a written confession in order to demonstrate that they were being ripped off.

The ruling in question pertains to a qui tam case involving two former industry employees and Blackstone Medical. The whistleblowers allege that Blackstone Medical, its corporate officers and management team paid spine surgeons between $1,666 and $8,000 per month to ensure that they use Blackstone implants on their patients. The defendants argued that the payments were officially used to recruit surgeons for Blackstone's Medical Advisory Board. The case hinges on proving that these payments were made in return for surgical volume. All surgeon contracts were signed by Blackstone President Matt Lyons. The smoking gun in the case seems to be e-mails that were sent between a former regional manager, and Vice President of Sales.

The e-mail between the aforementioned manager and VP related to padding more hours for a surgeon advisor. Unless there is a pre-trial settlement, this suit could pit former managers against the executive management team, resulting in choice. Will the parties agree to cooperate or protect a former employer? Ignorance is no excuse for a lack of jurisprudence. In order to be vindicated of any culpability the parties in question will have to prove that they didn't know that what they were doing was wrong, or, that the law didn't apply to them. The potential of jail time looms large. The defense of "I was just doing my job" just doesn't cut it. As for the government, it has acted as an amicus curiae, an advisor, a friend of the court. But could there be more than meets the eye?

This week may turn out to be the week that CEO's in the medical device industry, pharma, and nursing homes wake up to the fact that jail time may be awaiting them when their companies are involved in Medicare and Medicaid Fraud. One could hear the outcry from our bloggers. "That damn government is at it again, meddling in places that they shouldn't be meddling in." The double standard that exist within the business world is sheer insanity. CEO's and top executives are usually in the position of leadership for the simple fact that they are supposed to lead. Numerous books have been written on this subject. Leadership means taking ownership and responsibility. It means integrity, transparency and honesty, knowing your employees, to name a few traits. So the question must be asked, how does someone whom is supposed to lead and guide an organization be so unaccountable when things go astray? There are obvious exceptions to the rule. Usually when a company develops a reputation for questionable business practices one must wonder is it in their DNA, and, who ultimately pays for these transgressions? Is this a victimless crime? "Ignorantia juris non excusa, Ignorance of the law excuses no one." As William Jennings Bryan once said, "destiny is no matter of chance, it is a matter of choice." There is a fundamental imbalance in the judicial system when someone robbing a gas station for $50 receives a 10 year sentence while some executive goes on to his next venture just because the company can pull out its check book and write a check with many zeros. Save us the outcry, because contrary to popular belief, their are some exceptional CEO's in this industry, unfortunately, it takes a minority to tarnish the reputation of the majority. Defense attorneys will argue that an individual cannot be held criminally accountable, or lose their jobs simply by the virtue of their status. Not when there is a smoking gun.

As people complain of government spending, the escalating cost of entitlement programs like medicare, social security, and unemployment, it is the alleged actions as mentioned that contribute to the fiscal burden that is placed on the U.S. credit card. The defense that a corporation is a legal entity having its own liabilities and privileges can be argued. Though not a person, someone must be held accountable for the actions of the corporation. Without people and their actions would the corporation thrive? Is justice served when a company pays a $46 million dollar fine when it probably earned 10X in profits? Just look at the current healthcare environment, there have been some companies that have been caught not once, but multiple times. Some have submitted false claims, marketed drugs that have not been properly tested for their safety and clinical efficacy, and paid kickbacks to doctors. The usually response by a CEO is that they had were not cognizant of what was going on. Unfortunately, when your signature or signatures are on specific documents, ignorance is no excuse for lack of jurisprudence. Why would any individual be responsible for running a company if they did not understand the law?

Before everyone starts blaming the government, or the POTUS, or TSB, or the whistleblowers in this case, scrutiny of the spine industry is being driven by those in the rank of file. People are tired of the games that those on top seem to continue getting away with, while some reap the rewards and discard the collateral damage, as business as usual. People are not a commodity where you chew them up, and spit them out. It's tough enough getting up every morning, it is even tougher when barriers and obstacles are placed at every step. So as another door closes, another chapter begins. Someone is going to pay the price for some past indiscretions. This time, maybe $50 million in escrow will not be enough to bail someone out of doing some time, yet, justice must be served, until then, the party continues.

So in the end, maybe there is a lesson to learn in all or this. It takes less energy to be nice to people, than it does to be a prick. If you treat your fellow man with an ounce of dignity and respect, rather than arrogance and disdain, one of these days the big dog is not going to come back and bite you in the ass. Karma is a bitch.

41 comments:

I believe strongly that what occured here was unethical and unprofessional. But how does this constitute Medicare fraud? I see a company paying a doctor to utilize their implant vs. some other implant by shady means.

6:43 - Someone is welcome to correct me if I'm mistaken, but I believe the allegation of Medicare fraud stems from the company contributing to the the defrauding of Medicare, namely paying someone who is profiting personally from purchases they are making on behalf of the government.

When the defendant in a False Claims Act action is a non-submitting entity, the question is whether that entity knowingly caused the submission of a false or fraudulent claim or false records or statements to get a claim paid. The statute makes no distinction between how non-submitting and submitting entities may render the underlying claim or statements false or fraudulent. The law has made it clear that unlawful acts by non-submitting entities may give rise to false or fraudulent claim even if the claim is submitted by an innocent party

Blackstone's legal team argued that only persons who knowingly submit or cause the submission of a false or fraudulent claim can be held liable for violating the FCA. The term "CAUSES" is hardly boundless, it has been richly developed as a contraint in various areas of the law.

As one attorney who analyzed this stated, "Blackstone was saying that they can't hold us responsible because the hospital believe that it was doing the right thing and had no knowledge. They thought that they would get away with it as long as it was an indirect kickback. What's pretty clear is that they better stop bribing doctors."

Philadelphia Inquirer today published a long article on the Synthes Norian vertebroplasty case. Sentencing will be this week. It makes interesting reading, is unfortunately not yet availabe on-line. Unbelievable that Wyss escaped any indictment. It used to be that at Synthes nobody farted without his knowledge.

$100 million? One must assume that there is an ongoing parallel criminal investigation that rests on the outcome of the civil suit. TSB may be correct in that iSendro and Dukate may still have to make a decision between jail time or testifying against an old employer. My over and under is that if it comes down to loyalty they will sing like a canary rather than go to jail. JMHO

I still do not understand the allegations here and don't see how Blackstone could be proven to be responsible for "causing" a physician to submit false claims or commit Medicare fraud. I recall the Kyphon 75M settlement a few years back when they were coaching physicians to keep patients overnight to reap DRG instead of CPT reimbursement - the violations in that instance were clear. Are the physicians "advisors" here being accused of Medicare fraud? If so, how would Blackstone be responsible? How could they be responsible? I appreciate anyone's informed answer to these questions.

Wyss probably knows the judge, or bought him off, or the judges wife was on the board with Wyss at the museum. Let's see if the poor slobs pay the price. Selling Norian for $22 mil basically made the fine a wash and Synthes rid itself of an albatross.

Was Wyss part of a closed door meeting where it was suggested that he sell and get out of the medical industry or they will come after him? The grand jury testimony clearly indicts him of knowledge and giving clear direction about the use of Norian. Of course, what US Attorney is going to take on someone worth $7.5 billion with a B in cash? Someone has to know why he wasn't charged?

"Synthes' chief executive officer and largest shareholder, Hansjorg Wyss, 73, was not charged in the criminal case, though the government said in the indictment that he had "directed" in 2001 that the test market begin. Memeger declined to say why Wyss was not charged."

The Wyss story has as many holes as an Emmenthaler cheese and stinks far worse. Certainly appears like he sold his lieutenants down the river. Walsh only joined the company after they had started their non-study. So he's found guilty of not stopping it? Talking about double standards and class justice...

"Before everyone starts blaming the government, or the POTUS, or TSB, or the whistleblowers in this case, scrutiny of the spine industry is being driven by those in the rank of file. People are tired of the games that those on top seem to continue getting away with, while some reap the rewards and discard the collateral damage, as business as usual. People are not a commodity where you chew them up, and spit them out. It's tough enough getting up every morning, it is even tougher when barriers and obstacles are placed at every step."

Such as, "That doc is a paid consultant by Blackstone so I won't waste my time knocking on his door."

Question: What would happen if surgeons decided to not sign these contracts and used what was best for their patients? Comedy...this is all just a tragic comedy. The pressure to make a profit and deal with their every request...there lies the devil in these details, not just the CEO who signed the contract.

If manufacturers operated more efficiently it would never get to this. They would have more money to put out better products and surgeons would simply have no choice but to want to use them. Excessive shipping, reps chasing inventory, antiquated tracking...these are the real thieves that translate into sales pressure. Automate everything and be done with it. Only then will good prevail over evil.

And why has that product pricing become inflated? Lost and misplaced product. Why report those losses when you can just inflate pricing? Reimbursemnt codes are just now catching up that's all. They are getting smart. Why do you think the FDA is pushing for the UDI mandate? Because CMS is backing it and licking their chops so they can enforce a proper and true correction. BTW ask FEDEX who their biggest users are...medical device manufacturers! MDM's don't trust their reps to hold onto product for longer than they have to because they lose it. 2 items that kill a bottom line...shipping and misplaced product.

Hello fellow reps/Area Managers/VP's. Just reaching out trying to put some serious (now I have done it) feelers out there for any possible open Sales positions in the Northern California Bay Area? Serious please, I need to possibly relocate there to be closer to a family memeber that is in a skilled nursing facility in San Jose area. Any leads would be apprecaited. Thanks

The smoking gun in the Blackstone case is the surgeon list that matches the surgeons to their spine spend per year. They were all paid $500 an hour as a "consultant for their advisory board". They called them "contact hours".

The crazy part in all of this is the correlation between the spine revenues generated by the surgeon and the amount of money they were paid. The top surgeon consultant was paid the most money based on the number of contact hours given to them. The more implants they used, the more money they were paid.

When Orthofix bought Blackstone they knew about some of these questionable business practices. They set aside millions of dollars in escrow in the event that one day they would be sued. Turns out they were right. I am not sure they set aside enough money. From what I know, it is going to get ugly. The hero's in this case are the two relators that came forward.

The spine industry is filled with greedy and unethical surgeons. Unfortunately, industry is just as guilty for perpetuating the fraud as well. This case will finally bring to light, the dark hidden truths that no one wants to acknowledge. I can only hope that a bunch of people end up in prison where they belong. My advice, don't bend over for the soap.

If anyone knows of an open sales position in the Northern California, please reach out on our blog to help this fellow spineophile land a job. No one deserves to be without employment especially during these crappy economic times, let alone worry about a sick family member, 3:47 anything TSB can do to help, let us know. Good Luck

This job is becoming a joke. surgeons complain all day about reimbursements (meanwhile they are 100% out of network and printing money), case volumes are down, FDA wont approve anything, Advamed wont let you take a dump in a drs office without being looked at... and I just had my 3rd pricing meeting with consultants in a month that will chop a 3rd of my territory just because they can...and yet im still here getting my head kicked in, filling trays, doing weekend trauma call, and scrapping to hit quota. where is the disconnect?

TSB thank you very much for the referral out to the whole field/blog group. I am currently up in the Sacramento area and have been in the Spine field for over 11 years with a solid background and professional achievements. However, due to a family members failing health and the need to take care of my family, I need to possibly relocate down to the Bay Area (East Bay or North Bay). My current company is offering little support so I am reaching out to this blog for any bones. Ideally I would like a direct position and am open to an Area Manager or Regional Sales Manager position, but am open. Much would be appreciated to anyone. Again, I am looking for serious consideration. I can be emailed at onespineguy@hotmail.com. Thank you to you all, best of luck selling and God bless